What can business owners do to reduce their taxes? Some need to make themselves aware of the various breaks available. Some of the benefits available to businesses for 2020 are the result of the 2017 Tax Cuts and Jobs Act (TCJA) and some were created by the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act). In addition, although the chance of any further tax or Covid-19 legislation seems slim, further changes may come.
If you're an entrepreneur and you've heard other business owners talking about the qualified business income deduction (also called Section 199A), you're probably asking yourself, “Should I incorporate to help save on taxes?” and “What entity should I select?”
Whenever you spend money on your business, the expense is either deducted on your federal tax return in the year it is incurred or depreciated over time. But much more is involved than just that. And when you hear terms like capitalization and safe harbor, it can feel even more complicated. Here are details to help you better understand the process.
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